Turbulent times for independent labs
COVID-19 has dealt a blow to optical manufacturers. OT spoke to Preston Everard on the closure of Kentoptic and the underlying challenges facing labs
The announcement marked the second independent manufacturing optician to close its doors through the coronavirus (COVID-19) crisis, as The Norville Group entered administration in July, before being bought by Inspecs.
The COVID-19 crisis has exacerbated challenges that already existed for many independent manufacturers and small businesses, from a shrinking market to technological developments. Preston Everard, executive manager of Kentoptic, gave OT his insights:
A shrinking marketOn 23 September 2020, I received the disappointing but not surprising news that Kentoptic, a manufacturing optician established in the 1970s, was not going to reopen after its closure due to the pandemic. We will go down in history as another victim of COVID-19. However, Kentoptic’s decline started years before the pandemic, and was fuelled by a changing and shrinking independent market and technological advances in manufacturing and communication.
Over the last 15 years, we have seen the multiple optician groups grow substantially, and as a consequence, the independent market decline. Our customer base was also declining due to closure or retirements. As an independent lab, this meant our work and opportunities to attain work had also diminished. Over the last five years, Kentoptic had probably lost more than 15 to 20 accounts for those reasons – accounts that were not easily replaced.
Reduced marginsAs independent practices see a reduction in footfall, and therefore a reduction in profit, there are only three things a practice can do: increase prices, increase footfall, or reduce overheads.
Over the years we had seen customers asking for bigger discounts, and when we could not discount further, our customers would have no option but to go directly to the supplier. It was a typical catch-22: our clients needed to save money, but we could no longer afford to do their work. No one is at fault; it is just the way the marketplace has gone.
The independent manufacturer can offer a unique level of service either due to a choice of products, or their proximity to their customers
Technology has also played a part. Remote edging is greatly improved and boasts a first-time fit rate of over 90%. This facility is being offered to opticians at very reasonable prices, and in some cases, depending on spend, is supplied free.
Lens edging machinery has become easier to operate and is more accurate. It can be an expensive option compared to remote edging, but it offers almost total control to the optometrist.
COVID-19 was the worst thing to happen to Kentoptic and many other businesses and its devastating effect was compounded by the time of year it hit. We could not afford to remain open and the only option was to shut down the factory and furlough the staff. When June came, we questioned whether to open again. A decision was made to remain closed. Significant factors influencing this decision were that we had no way of knowing what the working environment would look like, and the costs involved in restarting.
If the pandemic had not arrived, Kentoptic would still be trading today. However, our issues are insignificant compared to the human costs this pandemic has caused.
Once it’s gone, it’s gone
Kentoptic is not the first independent manufacturing optician to go, and I fear it will not be the last. Most of us lament the decline of the independent shop on the High Street and some of us remember the local corners shop, and the choice and convenience these shops gave us. Unfortunately, once these businesses had gone, they were gone.
The independent manufacturer can offer a unique level of service either due to a choice of products, or their proximity to their customers. For instance, Kentoptic offered a local van run throughout the whole of the South East – a secure and reliable delivery service that only a small independent could sustain. A practice would often phone us up with a specific problem or looking for a solution to an issue their client was having. With our experience and every product at our fingertips, we could almost always find an answer for their predicament. This is why independent labs are important for a healthy optical industry.
An independent lab has a limitless toolbox of products to choose from as they can source lenses from any manufacturer and pretty much from anywhere in the world. For example, that 11 cylinder or the + or – 18 dioptre lens your customer might need.
I can truly appreciate what a fantastic industry we have, and it is something to be cherished and appreciated
That is not to say branded products are bad – to the contrary – branded lens products and labs offer security, consistency and warranties that independent labs cannot match.
Without the branded lens sector pushing the boundaries of physics and developing new methods of manufacturing, while investing millions of pounds in research and development, we would probably still be offering uncoated glass bifocal lenses to our customers. Both branded and independent labs are vitally important for the future of optics.
There may be a small cost involved in supporting your local lab, but if you want choice, healthy competition and a vibrant industry in the future, you need both options available.
Support your local lab as much as you can. As an independent practice, you understand the issues of competing against a well-organised, well-funded multiple group. As an independent lab, we have exactly the same issues that you do.
For the independent labs, this is a numbers game. As independent practices continue to close or are bought out by larger groups, there will always be pressure on our sector. We have to adapt and find new revenue streams.
Digital surfacing – creating your own brand of lenses – is one way to achieve this. Offering an unbranded option for your customers could benefit all parties.
A factory outlet is another way. When I looked into this, we found we could increase our profit per job by 300%. But you are treading a fine line, as you go from supplier to competitor. This is why Kentoptic never supplied to the public.
An accompanying retail website is also an option. It is not as simple as some people may think, and to do it properly costs a lot of money. But how much more will this sector grow? It could be an option to supplement the income and ensure the survival of independent labs into the future.
I have always been an optimist. There was a need for the jobs before the lockdown, so it stands to reason there will be a need for them again after. Spending habits and priorities may change, but patients will still need spectacles. There may be a shift to the internet, but I still believe a pair of spectacles is a product that the vast majority of people will want to touch, try on, and see in person before they buy.
I have been in the industry for 38 years and I have loved almost every minute of it. Kentoptic had a great relationship with suppliers and competitors, and if I ever needed some help or advice, there was always someone on the end of the phone willing to assist.
Looking from the outside in, I can truly appreciate what a fantastic industry we have, and it is something to be cherished and appreciated.